Food Processors Ask Tariff Exemptions for Ingredients Not Available in the U.S.

Food processors are asking the Trump administration to exempt from tariffs coffee, cocoa, some fruits and vegetables and a handful of other ingredients and products not available in the U.S., according to a letter sent last week from Consumer Brands Assn.

“While CPG companies make every effort to source ingredients and inputs from U.S. farms and suppliers, some key ingredients and products simply are not available in the U.S.,” said the letter. “Products like coffee, oats, cocoa, spices, tropical fruits and even tin mill steel (used to manufacture specialty food and household product cans) are some of the more obvious examples of where lack of domestic supply necessitates imports.

“We believe targeted and carefully calibrated removal of these ingredients and inputs from tariffs is appropriate to best protect U.S. manufacturers and support your efforts to lower consumer inflation,” said the letter, which was signed by Melissa Hockstad, Consumer Brands’ president/CEO.

The letter also reminded the president, “The consumer packaged goods industry is America’s largest domestic manufacturing sector by employment, supporting more than 22 million American jobs and contributing $2.5 trillion to the U.S. GDP.” And it asked for “opportunity to further dialogue on these critical issues.”

Trump's tariffs – primarily on products from Mexico, Canada and China – come on the heels of more than a year of inflationary price increases for foods and beverages, with processors placing the blame on cost increases on ingredients and other inputs. Tariffs will increase those costs.

A March 10 Consumer Brands blog post authored by Tom Madrecki, vice president of campaigns and special projects, noted, “Tariffs applied without adequate understanding of risks are likely to bring deleterious shockwaves throughout nearly every critical supply chain. The most obvious impacts will be felt quickly at the grocery store — prices of pantry staples will increase noticeably, supplies will wane and consumers will have fewer choices overall.

“Meat, grain and oilseed imports as well as processed cocoa from Canada are critical to meeting consumer demand consistently,” Madrecki’s blog post continued. “Oats and other hardy grains are challenging to source domestically in the volume needed — taxes on Canadian imports for grain in particular would result in skyrocketing prices across a large swath of product categories.

“Mexican supplies of fruits and vegetables — like tomatoes and avocados — during the winter months help U.S. companies meet demand and ensure supply chain continuity regardless of weather impediments. The U.S. is simply unable to produce and maintain enough fresh fruit and vegetables throughout the year, so when California gets too cold, production switches to Mexico to keep things running smoothly.

“Consumer Brands encourages the administration to develop an approach that is attentive to the intricacies of the CPG industry,” the blog post concluded. “We look forward to coordinating on trade policy and continuing to advocate for the makers of the products consumers choose and trust.”